Recently, a friend mentioned that their new HR rep had implemented performance reviews at their company. When I asked what the process looked like, they said it was paper-based. My jaw dropped! Three decades after the dot com boom in an era when Big Commerce notes, “You can find SaaS products for almost any business applications you can think of,” employees can still receive a piece of paper extracted from a filing cabinet at performance review time.
Maybe I shouldn’t be shocked. HRSimplified shares, “Based on recent surveys it was found that more than 65% of companies with 50 or more staff still use paper-based HR practices.” Another alarming statistic comes from Formstack, “70% of the total waste in offices is made up of paper, and as much as 30% of print jobs are never even picked up from the printer.”
As many companies were forced to adopt remote work practices over the past couple of years, “... the need for HR digital transformation became more and more apparent,” observes Checkr. Today, SaaS products can solve for a variety of business and human resources management needs, benefiting HR teams, employees, and the company at large.
Let’s look at the benefits of HR software more closely to illustrate this point.
Benefits of HR Software for HR Teams
1. Cost and Time Savings
It’s no secret that People Ops and HR teams have a lot going on! Juggling day-to-day operations, implementing HR policy strategies, incoming employee requests, and executive mandates put a lot of pressure on HR professionals and teams to orchestrate their impact effectively. Their work also has a significant impact on the company’s budget, prompting constant scrutiny when it comes to investments and employee headcount.
Software solutions are an investment that, “... in many cases can literally make your team 2-10x more efficient,” notes Phil Strazzula of SelectSoftware Reviews. Through automation, HR teams can save time on rote tasks and focus their attention on more pressing initiatives. With the right systems in place, lean HR teams can bring comprehensive services without extra headcount.
Some services quantify these savings, like Bamboo HR’s ROI calculator. There’s even free HR software if HR teams need to start gathering employee data before an enterprise solution is approved. These resources can’t come soon enough, as IBM reports that “35% of companies are using AI in their business, and an additional 42% reported they are exploring AI”, and Grand View Research predicts “the global HR software market is expected to exceed USD 8 billion by 2030”.
2. Data Collection and Metrics
Spreadsheets, documents, and manual entry are easy avenues for mistakes to be made in employee information and data collection. Without a robust set of data to analyze, HR teams aren’t empowered to make a case for the investments the company needs. Sage HR points out, “By fully optimizing the data, data-driven decisions can prove to be impactful, particularly where there are vast amounts of data available to analyze and disseminate trends.”
The best human resources software can maximize the data HR teams collect, and ensure it’s kept up to date across various HR systems. This collection of data allows professionals to engage in HR analytics, a practice the Academy to Innovate HR (AIHR) says, “... involves gathering together, analyzing, and reporting HR data. It enables your organization to measure the impact of a range of HR metrics on overall business performance and make decisions based on data.”
Incorporating data analytics into HR can support decisions in recruitment, employee development, engagement, performance evaluation, and HR software, all essential elements for running an efficient and productive HR department, as emphasized by SHRM.
3. Templates and Frameworks
There are few things as intimidating as a blank page. Coming up with performance reviews, onboarding checklists, or employee engagement surveys from scratch can be a difficult task on top of keeping normal operations running smoothly. When you utilize HR software, those tools can help fill in the blank page with possibilities.
Performance management solutions offer templated messaging and standard structures and employee engagement tools give you question banks to choose from. These platforms may even offer baseline results from similar businesses in your industry to compare to. Nimble teams can make good use of HR software built for small businesses. These solutions help establish industry-standard policies and procedures while creating space for customization and creativity for you and your organization.
4. Security, Access, and Compliance
Loose paper files and locked cabinets are tools that cannot keep up with managing a remote team, hybrid workforce, or any other complex employment arrangement HR teams are tasked with solving today. Elementsuite rightfully notes, “Keeping up with compliance has always been an integral part of any HR team,” and that job is harder than ever!
A human resources management system (HRMS) can enable HR leaders to set granular permission settings, automate employment documentation, and more in order to keep the business running while maintaining confidentiality and compliance. Ensuring that employees have access to what they need when they need it is key to job performance and productivity.
Michelle Lanter Smith shares in Multibriefs, “Certain aspects of HR technology — such as cloud-based onboarding platforms, automated payroll processing, and customizable scheduling software — are particularly effective at eliminating compliance risk. These solutions provide employers with transparency into their entire operations, utilize built-in compliance safeguards, and allow for customization that allows employers to address specific HR challenges.”
5. Automation and Integration
A Deloitte's Global Human Capital Trends report states that 47% of manufacturers support their workforce through automation, with 24% utilizing AI and robotics for routine tasks, and 16% using automation to enhance human skills. Additionally, the WorkMarket Insight report by KRC Research reveals that 85% of business leaders believe workload automation will provide them and their employees with more time to concentrate on company goals that truly matter.
What exactly is HR task automation? HR Automation involves utilizing technology to optimize and improve different HR operations. Removing the repetitive administrative tasks from your HR team's plate allows more resources and creativity to be invested in strategic HR initiatives, backed up by the data collected in HR’s automated workflows.
6. Reliability and Reach
All of the benefits of HR software outlined so far result in greater reliability and reach for HR leaders and teams. Instead of relying on each person to remember to send a message about enrollment in training courses, or prompt someone to sign their I-9 form, automated HCM processes create reliable communication points employees can count on. Data and metrics on performance management and employee engagement give HR professionals a greater understanding of what it’s like to work at the company, employee performance, and company culture. This allows HR teams to accurately choose initiatives that will expand their reach and impact.
“It seems counterintuitive, but computers can make your workplace more human, and it starts with automating certain HR processes,” explains Tim Kulp for SHRM, “No longer bogged down by paperwork, simple questions, and data entry, HR staff can get to know their employees, build better relationships throughout the company and focus on strategic innovation within HR.”
Benefits of HR Software for Employees
7. Consistent Service
It’s easy for requests and messages to fall through the cracks in high-speed environments. Emails get lost in unruly inboxes, Slack messages disappear in the barrage, and Zoom calls cover so many topics that lower-priority action items get missed. Navigating incoming requests across multiple communication channels can be overwhelming for HR teams of one to many.
HR software can streamline requests and communications, allowing the HR team to address issues in a consistent and timely manner. Project management software can help track and manage both strategic initiatives and short-term issues, or some businesses may look into a help desk or service desk approach. All these HR tools not only improve the effectiveness of the organization but also positively affect the employee experience it offers.
8. Clear Processes
Sometimes, people just want to be told what to do! One HR professional cannot be tasked with individually informing every employee on how to submit PTO, what to include in the self-reflection on their performance review, and all the other processes an employee will be expected to partake in while they work at your company.
Taking advantage of Knowledge Management or free Intranet tools can allow for user-friendly employee self-service solutions to get answers to their questions without individual supervision. This documentation enables HR teams to clearly define their processes, allowing employees to follow along with little guidance. Other systems like performance management or ATS software notify employees of their responsibilities at every step of the process, clearing up confusion on who needs to submit what.
9. Greater Transparency
Joining a company can be an exhilarating and confounding experience. While many operating structures may be similar across organizations, new hires often spend a lot of time in a convoluted onboarding process. This includes learning the intricacies that will allow them to move their work forward and gain a sense of accomplishment. HR software can help to optimize employee onboarding by making it more transparent and less time-consuming for HR and the new employee.
Organizations that use software to increase transparency can help new hires and current employees gain a deeper understanding of the operational structure of the organization they’re working in. Organization chart software can make reporting lines clear, and give a better understanding of how departments, teams, and individuals fit together within a business. Compensation management solutions not only give HR teams greater control and transparency, but these solutions can also offer clear guidance to employees on pay bands and their total rewards.
10. Delightful Experiences
Most people have had a poor onboarding experience at some point in their career. Maybe you arrived on your first day and there was no desk assigned or equipment set aside for you, or your manager was absent in meetings so you had to introduce yourself in the office and learn the ropes on your own. The HR department was obviously overwhelmed and gave you the basic information to make sure you got paid on time, but no further education on how to work at the organization, company policies, or the company culture was relayed.
Contrast that experience with one where your manager sends a personalized email the week before you start, detailing where you should arrive and when they’ll be available to meet with you. Or the equipment you need arrives at your doorstep, along with some fun swag to spice up your home office. Imagine someone reaches out to you on your first day and introduces themself as your onboarding buddy, giving you an inside look at how the organization works.
Software can power delightful employee experiences, from onboarding to ongoing engagement. Through automated messaging, timely notifications, and seamless integrations, you can not only provide consistency, you can also provide some joy!
When Does HR Software Lose its Benefits?
With all the obvious benefits of HR software, is there any downside? There are a few issues to watch out for when evaluating the implementation of a new tool or HR management system within your organization.
Lack of Strategy
Phil Strazzulla of SelectSoftwareReviews observes, “At this point in the technology lifecycle, tools without strategy will very rarely fix major problems in your business.” While the best HR software tools are incredible for augmenting an HR team's initiatives, a human touch is still needed to truly evaluate the problems the organization is facing, and decide whether software will help or hinder that problem.
“Keeping humans at the top of the agenda is important in automation efforts,” Lisa Buckingham tells SHRM, "I believe putting people ahead of process and technology is ultimately how HR will enable an organizational transformation when it comes to automation." Without a strategic focus on the people an HR software tool is serving, the implementation will fall flat.
With the abundance of software available to “solve” all of HR’s problems, overloading employees with different tools to navigate can create new challenges and headaches. HR Brew surveyed almost 2000 employees and found that less software is more effective, noting, “Almost 70% of employees with one HR platform said they felt confident they could find the information they need, but confidence plummeted to 49% among those whose company used more than one platform.”
Simple solutions may be more effective, and evaluating tools that can solve multiple pain points, such as a one-stop-shop HRIS or HRMS may create clear advantages for both employees and HR teams. Software vendor evaluation is a key part of this endeavor! In the end, software providers can make or break your user experience.
How Do You Know When It’s Working?
While HR software systems may advertise some level of “set it and forget it,” it’s the HR team’s job to constantly check and evaluate the use and effectiveness of their tech stack. One key metric Phil Strazzulla recommends is monitoring the level of engagement. If employees aren’t using the tools you provide, they won’t be able to provide you with the metrics and employee data necessary to evaluate whether the solution is working.
Talking with employees can help you understand why some HR solutions aren’t effective for their work in the ways you expected it to be. Maybe the ATS interface is too complicated and time-consuming for them to input their candidate feedback, or a login process is so cumbersome, they can’t even access the articles you’ve published in the knowledge management system. Without human input and feedback, the software won’t get you anywhere. Your expertise and insight are still needed to make automation successful.
When you’re clear about the problem you want to use software and automation to help solve, you can also be clear about the real-time metrics and related data you’ll use to measure the effectiveness of the solution you implement. This strategic oversight will ensure your initiatives are impactful and your solutions can measurably improve the organization over time.